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IkeGPS to raise $6.25 mln to invest in new project

Friday 24th August 2018

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IkeGPS is in a trading halt as it sells up to $5 million of shares at a premium, with a further raise to come, in an effort to accelerate growth for its new project and smooth lumpy sales. 

The proceeds would "bolster Ike’s working capital position, underpinning a number of potentially significant IKE Analyze contracts that the business is in the initial stages of delivering, support the lumpy sales cycles associated with Ike’s core business of selling IKE4 systems, and enable investment into additional sales and support resources to advance further Ike Analyze opportunities," it said in a statement.

The money will be raised via a $5 million underwritten placement of new shares today, and a $1.25 million share purchase plan likely to open on Sept. 6. The shares for today's underwritten placement have been priced at 52 cents per share, a 4 percent premium to the last traded price of 50 cents yesterday. The shares have gained 19 percent this year.

The company, which develops tools to analyse and manage infrastructure, indicated last month that it might need more working capital when it announced its first-quarter results. Then, chief executive Glenn Milnes said there was a "meaningful pipeline of sales opportunities" for its new IKE Analyze product, which delivers pole analysis and asset reports, and an opportunity to substantially accelerate the growth of the IKE Analyze business which "would require higher levels of working capital in the short term but could deliver outsize revenue and gross margin growth over and above our base FY19 plan if we are successful."

In the March 2018 year, Ike narrowed its net loss to $6.7 million from a loss of $10.6 million a year earlier. The company said at the time it expects to lift annual sales by more than 30 percent again and keep operating costs flat, leading to earnings before interest, tax, depreciation and amortisation breaking even.

(BusinessDesk)

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